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Transcript: Community Broadband Bits Episode 354

This is the transcript for episode 354 of the Community Broadband Bits podcast. In this episode, Christopher talks to Angela Imming, Director of Techology and Innovation for the city of Highland, about the Illinois community's fiber network, Highland Communication Services. In particular, they discuss how the community owned network analyzed and improved its approach and how to define success. Listen to the episode, or read the transcript below.

Angela Imming: The data just bubbled up to the top and we knew why the customers wanted us to do that, and that became our message. And that message is one of ownership. It's a bit of a pride in "No, we wanted to do this, and look, we are doing this, and we will celebrate because of that."

Lisa Gonzalez: Welcome to episode 354 of the community broadband bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. During the Broadband Communities Summit earlier this month, Angela Imming from Highland, Illinois, was able to make time to talk with Christopher. They talked about the community's publicly owned network, Highland Communication Services. Angela offers some pearls of wisdom that come from a place where the city has experienced a few bumps in the road as they've worked to improve and grow their network. She talks about how they've collected data from the community and listened to subscribers to improve the services they offer and how those changes have increased their success. Christopher and Angela also have a conversation about the meaning of success as it pertains to a community network and the way that HCS is using tools from both the public and private sectors to drive growth. Now, here's Christopher with Angela Imming from Highland Communication Services.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance, normally in Minneapolis. Today I'm in Austin, Texas, for the Broadband Communities Summit, and I'm speaking with someone that I have wanted to have on the show for a long time, Angela Imming, the Director of Technology and Innovation for the city of Highland in Illinois. Welcome to the show.

Angela Imming: Thanks Chris.

Christopher Mitchell: We just finished up a panel about four different communities that have faced significant challenges. We're going to talk about what you've done in building the municipal fiber network, but the first question, I always like to try and locate where we are in real geography. So where is Highland?

Angela Imming: Yeah, so we are in the southern part of Illinois, but for anybody who is from that area, they know that we're really not south. There's three and a half hours more south of us. We are actually about 35 minutes to the east of St. Louis, so that gives you a good idea.

Christopher Mitchell: Your title is the Director of Technology and Innovation.

Angela Imming: Correct.

Christopher Mitchell: You have a municipal electric, you have a head of that utility, but the fiber network answers to you.

Angela Imming: Correct.

Christopher Mitchell: Okay, so just tell me how that works briefly.

Angela Imming: Yeah, sure. So the city of Highland went out for bond letting after a referendum about 10 years ago when it was evident that the incumbents weren't going to be building out for us, and the way we were able to get that referendum passed is we had funds sitting available in our enterprise fund, which is our Light and Power department. So we own our own distribution for electric, we have some generation. Dan Cook is the Director of Light and Power. He has the resources to dig stuff in the ground and hang stuff on the poles anyway, and so it was a pretty obvious choice when — you know, it's not high voltage, it's low voltage. Can you just open the ground and put this in for us? So those folks, IBW, report to Dan. All the other parts of HCS report directly in to me. So that would include our triple play service — we have voice, video, and data — and service technicians, customer service, billing, all of that.

Christopher Mitchell: So we're going to jump back briefly to before you were there. I'm sure you know more about the history than I do anyway, but I know that this was before your time. Mark Latham, city manager, I believe?

Angela Imming: Correct.

Christopher Mitchell: Yeah, he was just telling me that he thinks that one of the things that was really important to the success of your network, especially given the challenges that you faced, was that referendum demonstrating the community support for it.

Angela Imming: Right. That is correct. He tapped me on the shoulder and said, "Don't forget to tell everybody how important that referendum is." Somebody in the panel earlier talked about, you know, you have to leave politics out of it. You have to figure out a way to leave the politics out of it. And I think that's pretty much impossible given that we are a city and we are owned by a city, but I would say that the next best thing would be to empower the politicians, right? Empower them with information, empower them with data. And that's exactly what the referendum did. See, we want this, we as a community want this, and they are clearly servants of the people. And so, that helped to get it across the line.

Christopher Mitchell: And am I remembering correctly? It was 79 percent support, I think.

Angela Imming: I believe it was, yep. 79 percent is what the stories say.

Christopher Mitchell: I actually vaguely remember that, and I think I sent a note to Mark Latham around 10 years ago in which I was like, "Hey, can I get the wording in that referendum just so we can document it and have it in our files?"

Angela Imming: I could get that for you if you wanted it.

Christopher Mitchell: No, I have it.

Angela Imming: Okay, good.

Christopher Mitchell: He responded. Yeah, we have it somewhere on muninetworks.org.

Angela Imming: Okay, great.

Christopher Mitchell: Yeah. So, one of the things I wanted to talk to you about was this idea of the turnaround communities. Highland is a network that that is clearly successful today, but there are days in which, I think, before you came on and why you came on, that it wasn't clear that it was going to be successful. So tell me what happened.

Angela Imming: I don't know what happened to make it fail or what happened to make it successful. You know, there's a line there, I think a continuum, where failure stops and success starts, but there's a big gray area in between that you kinda have to move around. One could say that we had 44 percent saturation rate, and we hadn't used all of our bonds, and you know, we were growing, and we hadn't even expected to be cash neutral until the year 2032. So on those laurels, it feels like we were pretty successful, but from the eye of the beholder is really what determines your success. And so, we had some new management in the city, and excitement was waning, and we had not a high enough take rate. You know, we weren't doing enough.

Christopher Mitchell: And for context, 44 percent is good. I mean certainly, you always want more, more is better, but a lot of munis in years three and four, they might be around 35 percent and they're worried there, but —

Angela Imming: I think you're hitting on a note I probably should have brought up in the panel, and that is that, you know, your take rate isn't the indicator of success and neither is the ARPU, the average revenue per user. Your success is indicated by your profit, your profit margin, and if you have an ARPU of $127, but you have a cost of $187, you're not successful.

Christopher Mitchell: Right, and I think it's worth noting, I mean, you're describing the way it will naturally be evaluated if there's not a message coming from the utility.

Angela Imming: Correct. That's correct.

Christopher Mitchell: People just naturally think success means more revenues.

Angela Imming: Yes, that is correct. And so, while we were kind of tracking where we wanted to be, we knew that in order to continue to build out and continue the support of the community, we had to hit that sweet spot of success. I guess when the excitement wanes and you kind of fall back to the fundamental reason of what you're doing and why you're doing it, that has to be very clear and that has to be messaged. And so, I just took an approach that has been very good to me over the course of my career. It's the DMAIC approach, which is Lean Six Sigma continuous improvement approach where you basically go through the steps to define and to measure and to analyze and to improve your process. And so, for two years, knowing that the quality of our product just really wasn't enough to make people come to us, we went through the very fine operational excellence details. I won't get into it, but just know that, you know, you have to take that process improvement approach at times. So when we got to the other side of that and we realized that, hey, guess what, we have a very legitimate — we have a very competitive product and we still weren't bumping those take rates up, we had to look at our acceptance rate and why people weren't accepting us. That's when it got fun, frankly. That's when we decided to really get into the minds of our customers, and we worked with the digital economist Michael — Michael Curri and we —

Christopher Mitchell: C-U-R-R-I, from SNG.

Angela Imming: C-U-R-R-I. Shout out to Michael — and Gary who is a solid hand. And you know, we just kind of worked through the process of figuring out what it is that our customers wanted. If you don't have the data, you can't measure the data, you can't manage the data, and so we just went back on the fundamental ways of execution. And we got amazing data from Michael. Not only did we find out that 23 pwercent of our customers said that they would — or the respondents, I should say — said that they would relocate if it weren't for high speed broadband. We got that answer from five different perspectives. So we got that answer in terms of what the household composition is — so how old are the people in your house? We got the answer from the perspective of how long have you lived in Highland? What is your education level? What is your financial means? And so from that data, we really were able to say, "Okay, right, people want gigabit Internet and they will pay $100 for it, and they really don't care a whole lot about this other product that we have that we're gutting through to try to make it valuable."

Christopher Mitchell: Is that other product video?

Angela Imming: Actually, it's linear video. Yeah. And we found that they were starting to warm up with the idea of streaming and over the top, which gave us the political leverage to say, "This is something that we need to do. We need to act on this." The tipping point, if I could find the moment prior to engaging with Michael, we decided to hold a summit, a broadband impact symposium, within our town, and we invited Bob Knight and Jeff Kling and Michael Curri. And we had different breakout sessions — so one for small munis and not-for-profits (we invited other munis in). There were anchor institutions, small businesses — and got through the day with a lot of enthusiasm and excitement. The evening was dedicated to — it was a different venue. It had a lot of fun stuff, snacks, and whatever. And it was dedicated to our residents to come in and tell us what they need that we don't have and what we're not doing right. And do you know that nobody came?

Christopher Mitchell: You know, I feel like, when you're saying that, my reaction was thinking that probably no one came or everyone came. It's often not in the middle it seems like.

Angela Imming: Nobody came.

Christopher Mitchell: So what did you take away from nobody coming?

Angela Imming: Well it was beautiful because we had two members of council who were there and we had three or four members of our industrial development commission, and that right there told the story. They had heard all day that we are diamond in the rough, that we are a gold mine, and people just don't know what it is that we have, and then with their very own eyes they saw the fact that nobody came. And at that point they commissioned us to go into a full fledged marketing analysis and research campaign. And from that we worked with Michael, and the rest really is bit of a history.

Christopher Mitchell: So one of the things that you mentioned on the panel was a sense of internally there was a longing for goals. There was sort of almost a stagnation in terms of people didn't really have a sense of why it was important that you were doing this.

Angela Imming: Right, right. So about four years in, which I'm beginning to understand is the pivotal point, you know, we were just stagnated. And this is when I came onto the scene, and I had the earnest question: why are we doing this? You know, what was the goal? And when I started asking around, like, nobody could say exactly why we were doing this.

Christopher Mitchell: And when you're saying "this," you mean Fiber-to-the-Home?

Angela Imming: Why are we building — yes.

Christopher Mitchell: People were dissatisfied with the company.

Angela Imming: People were dissatisfied. That's not what they said, but you know —

Christopher Mitchell: We try to keep a clean tag, so thank you for not repeating that.

Angela Imming: That's going to be hard for me. At any rate, if you don't have the very clear "why," you'll never have the "because," right? Why are we doing this? Because. And so, you know, at the end of this marketing and research engagement, the data just bubbled up to the top and we knew why the customers wanted us to do that, and that became our message. And that message is one of — it's ownership. It's a bit of a pride in "No, we wanted to do this, and look, we are doing this, and we will celebrate because of that."

Christopher Mitchell: So where are you at today then? So you know, you felt like you were not meeting your goals at 44 percent. You've been on the job for five years?

Angela Imming: I was hired with the city about five years ago, but I was hired just for the IT set — I shouldn't say just — to be the IT director. And then they kind of lured —

Christopher Mitchell: Victim of your own success.

Angela Imming: Yes, that's exactly right. They lured me in. So I've been responsible for HCS for about four years.

Christopher Mitchell: Highland Community Services.

Angela Imming: Highland Communication Services.

Christopher Mitchell: Right, Communication.

Angela Imming: Communication, yeah.

Christopher Mitchell: That's actually what I meant to say. It's just my brain didn't communicate to my mouth. Right now, where are you at then?

Angela Imming: Right now, gosh, I just can't help but smile. We have 57 percent.

Christopher Mitchell: I think last time I talked to you it was 54, so you're still growing.

Angela Imming: Yup, we're eking up. We have the support of the community and the council to continue to finish the construction. We have about 15 percent of premises left to build out to.

Christopher Mitchell: So you haven't actually finished connecting all the people?

Angela Imming: No, we have two neighborhoods that are still clamoring, you know, "Ah, I want you, I need you, I need you," so it's built into the plan to complete that in the next year. So 12 months from now we should be complete. Our profit is trending towards a 15 percent increase annually. We have come to a place where — and I realize that the financial goal either was or became to be able to operate in the black were we not paying for our bonds. So as we went through this, you know, "What are we doing here? Why are we doing this?" you have to identify what your success is. How will we know if we're successful? Well, we'll know we're successful when HCS could manage their operations and pay for their own operations, not in debt, were it not for our bond debt, our debt service that we had to cover. And we're there. As a matter of fact, when we take into account that were we not growing, were we not still, you know, kind of in the growth mode for construction —

Christopher Mitchell: Right, it costs a lot to connect a home.

Angela Imming: Yes. Were HCS not here and all of the city services had to use the incumbents and were we not paying for our debt service, we would be in the black probably a little bit too much, probably about $350,000 - $400,000. So that's where we are right now. We are deploying some of the items that the customers requested through the survey, which one was just a complete loss. I had no idea that people actually were interested in someone providing networked security cameras that were in a managed environment. So basically, we created a new product called PremView.

Christopher Mitchell: And that's for residents?

Angela Imming: Residents, commercials, either.

Christopher Mitchell: Both.

Angela Imming: Yup. We've one upped them a bit. So we've said, since we own our own network and we have our own data center with all kinds of storage in there, we will deploy your cameras, we will show you how to use them, how to access them, and we will give you 10 gigabytes of storage on our fully redundant, high availability servers in our data centers so that you can keep four months of it.

Christopher Mitchell: And there's very little operating costs for you to do that cause it's all in network.

Angela Imming: Yeah, that's exactly right. And so, that's what we're trying to do is capitalize and bring new products in to the mix, on top of things that we've already paid for.

Christopher Mitchell: One of the things you mentioned on the panel was the social media aspect and it's really helped you to grow, and so you didn't just start, you know, splattering images on Instagram. You were a little bit more careful about that.

Angela Imming: Well, I tried. I guess one thing that I don't know if it's a credit or a curse, but I'm a very methodical person. And I feel like in times like these, when the energy and the enthusiasm is gone, you have to fall back on a process. And so, after we had gone through the continuous improvement process and made our product high quality and we were in the middle of our acceptance — trying to get acceptance is when we did a lot of that in house. I created a lot of marketing, advertising campaigns. Some were fairly successful, but when one of the council people asked, "Well, how come you're not on Facebook all the time? You know, all these other incumbents, they've got someone responding on Facebook all the time." And I probably shouldn't have said it this way, but I said, "Well, what do you want me to say?" Like, I don't know. We're here, we're great. You know, we're cheap, we're better. Harvard University says we're the fifth best.

Christopher Mitchell: In terms of cost. You're the biggest advantage over the incumbents, I'm guessing.

Angela Imming: Yes. Fifth best economic choice in the country.

Christopher Mitchell: That's the Berkman Klein Center report.

Angela Imming: Yes. But how do you say that, right? And so again, after the survey with Michael, we had been commissioned for some additional funds and so we took that money and we went to the professionals. We chose Drive Social Media — they're in downtown St. Louis — and we embarked on an advertising campaign that embeds our product inside of social media. And we get the advantage of the Facebook algorithms and the Google algorithms, and every four months they come back and they show us that we only spent 67 cents on that advertisement and these are the people who saw it and which graphic and which text did better. And so, we're constantly improving that. It's been very fun. It's been a lot of fun.

Christopher Mitchell: Is that you then? I mean, how does that work in terms of what kind of time does that take to manage that?

Angela Imming: At the outset, it's very involved. Besides the photo shoot that comes out, you know, you sit down with our designers and I guess our team. They get inside of your head. You know, what do you like, what do you not like? It was very hard for them to understand that I'm not worried about repeat customers and I'm also not worried about the high ticket products. I have to sell the product that brings me the most profit, and it just so happens that that's not the most expensive product on our list. But the other thing that we did was we started utilizing social media and the web to put Highland in front of people who might be looking for a new home. So for example — this was taxing — we went out and said, based on our survey results and based on who we are as a community, we don't feel like millennials who were in the city would assimilate in Highland. We don't think that we have what they want. We feel like the best thing Highland has to offer is a new home for somebody who maybe had lived in a small town but their town has dried up. So what we did was we took the algorithms and said, if you live in these zip codes, which mapped to small Illinois communities, and if your browsing traffic shows that you are looking for real estate or you're looking for a job or you're seeking cost of living requirements, then we are able to just pop a photo up or pop an advertisement up in front of their web browser that talks to them about the city of Highland. So what started as an advertising campaign for Highland Communications, halfway through, I indicated we need to do this for all of the city, not just for Highland Communications, and it's working. We track our outgoing customers for why they're leaving us and we track our incoming customers for why they came to us. We track that data and we write reports based on it. Those are our metrics now. Our churn rate is down 45 percent, and the churn rate when people leave, it's not because they're leaving Highland, it's because they're leaving the area that we — they're moving out into the country. And so, we can measure the impact that this has had on us.

Christopher Mitchell: Is there a specific surprise in terms of what images worked best or anything like that? I mean, is it like a rack — I'm guessing not a rack of fibers or, you know, just a picture of a water fountain or something.

Angela Imming: Yeah, I'll tell you what goes over very well. And so we have a couple of different, they call them audiences, right? So we have the local audiences where we are trying to just make them feel good about us, and then we have the audiences that we're trying to attract to come to the city of Highland. Hands down. The ones that work the best internally are those that are coupled with the movie theater in town because it's ancient and I guess they renovated it maybe 10 years ago, but the memories and the feel good emotions that come with that . . .

Christopher Mitchell: It's just, a lot of small towns have totally lost their theaters, so just the fact that you have one is a big deal.

Angela Imming: Yes, that gets all kinds of traction. And then the other one are any photos that include people that are familiar in the city. So we did photo sessions of our internal city, right? So when our customer service representative is in one of the advertisements or when my daughter is in one of the advertisements, that goes very well. In terms of externally, people love green space, they love big homes, and so anytime we flash up a photo of a nice home with a nice yard, and then we mention, "Oh, we were voted the best recreation center in Southern Illinois. We have the fifth best fiber in America. We are 30 minutes from downtown. We have, you know, accredited schools," I think that's the draw. People love the idea of a small town with big city amenities, and that's really what we are.

Lisa Gonzalez: So last question is, I think, what is one of your favorite anecdotes of why the success of this network matters?

Angela Imming: It has to be successful. We have legendary people from the city of Highland. I mentioned on the panel, we have a gentleman with 1,397 patents from the city of Highland — you know, milk and evaporated milk, canned milk, which seems like maybe it's insignificant, but that process was invented in Highland and it allowed milk to be transported across America to urban cities where cows don't grow.

Christopher Mitchell: Right. Also important in war zones, like where our military needs to fed.

Angela Imming: Absolutely. That's exactly right. And so, we just can't fail because this is us, this is who we are, and we have a legacy to protect.

Christopher Mitchell: Great. Well, thank you for coming on, Angela.

Angela Imming: Yeah, sure. I appreciate it. Had a good time.

Christopher Mitchell: Great.

Lisa Gonzalez: That was Christopher with Angela Imming from Highland Communication Services in Illinois. We have transcripts for this and other podcasts available at muninetworks.org/broadbandbits. Email us at podcast@muninetworks.org with your ideas for the show. Follow Chris on Twitter. His handle is @communitynets. Follow muninetworks.org stories on Twitter. The handle is @muninetworks. Subscribe to this podcast and the other podcasts from ILSR, Building Local Power and the Local Energy Rules podcast. You can access them wherever you get your podcasts. You can catch the latest important research from all of our initiatives if you subscribe to our monthly newsletter at ilsr.org. While you're there, please take a moment to donate. Your support in any amount keeps us going. Thank you to Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons, and thank you for listening to episode 354 of the Community Broadband Bits podcast.

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When incumbent providers cannot serve the broadband needs of some localities, local governments should be allowed--no, encouraged--to step up to the plate and ensure that their citizens are not left on the wrong side of the great divide. So it is regrettable that some states are considering, and even passing, legislation that could hinder local solutions to bring the benefits of broadband to their communities. It's exactly the wrong way to go.